How strong leadership can prevent terminations and lawsuits

On The Apprentice, firing an employee gets simplified down to two words: “You’re fired!”

But in the real world, terminating an employee is much more complex. It’s a big deal and carries potentially huge ramifications if handled inappropriately. Interestingly, companies with strong leadership and an equally powerful culture may be able to largely avoid terminations — with the added bonus of minimizing exposure to wrongful termination lawsuits as well.  

Preventing Terminations

Before we dig into this, it’s worth noting that even if you handle a termination perfectly, a disgruntled employee may still bring a suit against you (even if it’s unfounded). You can’t control what the employee does afterward, especially when emotions may be running high, but you can certainly guide the situation as much as possible until that point. In any of these situations, obtaining legal counsel can make all the difference. We frequently work with Axia Law in Chicago, because of their amazing track record and depth of knowledge in this area.


With that said, every manager will have to eventually terminate an employee. It’s really an inevitable scenario. In my experience, companies with great leadership and a well-defined culture may encounter lower rates of turnover, including terminations.


Let’s look at why these two criteria work well as a termination prevention strategy. I like to use the acronym S.A.F.E. to explain this.  


Stream of communicationWhen a manager is also an effective leader, they tend to recognize the importance of not only smooth day-to-day operations, but also the stream of communication that makes that possible. They place a high value on employee communication and offer a truly open door policy.


Accountability — From day one, leaders establish realistic expectations for each team member. And they reiterate those expectations, along with pertinent goals, on a daily basis. Leaders hold their people accountable…consistently.


Fairness — This piggybacks on the last one, but effective leaders believe in fairness. They treat their staff well and with respect. However, they apply the rules equally to each teammate, without indulging in favoritism.


Engagement — The strongest leaders among us realize that leading and coaching yields much better long-term results than, say, screaming and yelling. They know how to bring employees into the fold, encourage them to share their ideas and feedback, and continually motivate them to strive for more. They realize that happy, engaged employees are more productive and committed to the company’s success.


Ideally, if the culture is well-defined and the hiring processes are dialed in, the “bad” employees won’t get hired in the first place. But those who make it through the hiring process usually don’t last long when the S.A.F.E. method is fully implemented. They’ll often just quit on their own when they realize what is expected of them and the high level of accountability that will be utilized. Firing becomes an infrequent, perhaps even rare, occurrence. The upside is that this arrangement also decreases the likelihood of a wrongful termination lawsuit.  


Termination Time

If you do need to terminate an employee, documentation is paramount. By the time an employee reaches this point, you should have signed documentation on file spanning the entire length of the individual’s employment.


For example, you should have signed copies of all written policies and procedures on file for each employee. Any performance reviews or corrective action plans that were implemented would also be signed by the employee and filed.   


When you have to let an employee go, it’s easy to get nervous or caught up in the emotions of the moment. Having your HR team create a checklist can help you stay on track and avoid any potentially costly or disastrous missteps.


But the best goal is to focus on developing a sound company culture and leadership team. Dial in your hiring and screening processes too and you’ll likely find that terminations will naturally decrease as well.


Have you had an employee file a wrongful termination lawsuit? What was the outcome? What preventative steps do you take? Please tell me in the comments below!


Carrie Luxem is the founder and President of Restaurant HR Group, a full-service HR group based in Chicago, IL. Carrie will be sharing her wisdom from over 15 years in restaurant human resources through guest-posts on the Homebase blog.

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